Does Using a Good Accountant Lower the Odds of a Tax Audit?

An accountant reduces your odds of an audit by knowing current tax regulations and rules.

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Having an experienced tax accountant advise you and prepare your annual returns usually reduces your chances of facing an Internal Revenue Service audit. Be aware that there are many "good" accountants who have little tax experience. To lower your odds of an IRS audit, be sure to use an experienced tax accountant. Selecting the right tax accountant will result in lowering your taxes and your chances of an audit.

IRS Screening

Your tax returns are screened at least twice for miscalculations, missing income from W-2 or 1099 forms, which include interest, dividends, rents, royalties and independent contractor earnings. Tax returns are screened once at your local office and secondarily at a larger regional facility. At the regional office, the IRS also uses software, called Discriminant Function System, to "score" your return. The higher your score, the greater the chance your return will be scrutinized and analyzed for problems.

Tax Accountants

Many outstanding accountants are in private practice or function in — or, at the top of — accounting, finance or treasury departments of organizations. However, this is no guarantee that they are up-to-date with or specialize in IRS tax regulations. You should consider only those accountants who are highly experienced with current regulations to help you minimize your tax bill and prepare your returns in a manner that discourages IRS audits.

Accountant Advantages

Tax accountants understand the "unofficial rules" of IRS audit red flags. Neatness and clear presentation is the first key factor. Good accountants know that, should human agent eyes examine your return, clear, neat documents show a sense of organization and make a professional impression. Accounting experts also understand you must report all income, as the IRS has many checks and balances to identify unclaimed income. When you use a good accountant to prepare your return, you immediately increase the credibility of your return, further decreasing the odds of an audit.

Frequent Regulation Changes

Reducing your chances of an audit does not include paying too much tax. An experienced tax accountant stays up-to-date on all IRS regulation changes to help you minimize your tax bill, along with reducing your odds of an audit. The White House and Congress tend to use tax regulations as a political football every year. This leads to frequent changes in tax laws. By keeping current with new regulations, a good accountant avoids using old, outdated laws to prepare your tax return. This feature alone reduces your odds of an IRS audit.